Why do founders fail?
Ben Horowitz wrote a blog entitled “Why Founders Fail: The Product CEO Paradox” in response to being asked why they at a17z have removed founding CEOs, given they typically prefer them, which is worth reading if you are a CEO.
In the extremes, I have seen cases where CEOs of startups are removed from product to the extent it seems they are just waiting for a product to be done and then the real work starts. This comic comes to mind:
For your customers, the statup is your product!
Ben writes there are three main reasons why founders fail and so would be removed by investors, with the third one being the topic of this post:
- The founder doesn’t really want to be CEO – The CEO skill set is incredibly difficult to master, so without a strong desire to do so the founder will fail.
- The board panics – Sometimes the founder does want to be CEO, but the board sees her making mistakes, panics and replaces her prematurely.
- The Product CEO Paradox – Many founders run smack into the “Product CEO Paradox”.
The Product CEO Paradox is:
The only thing that will wreck a company faster than the product CEO being highly engaged in the product is the product CEO disengaging from the product.
Ben says that great product-oriented founder/CEOs such as Gates, Jobs and Eilison stay involved in the product throughout their careers. This is achieved by reducing their level of involvement in any individual set of product decisions, but maintaining their essential involvement.
So what is essential involvement?
- Keep and drive the product vision
- Maintain the quality standard
- Be the integrator
- Make people consider the data they don’t have
He has 3 recommendations in how to manage this involvement:
- Write it; don’t say it. Make a formal document, don’t send an email
- Formalize and attend product reviews. Don’t change work and plans in the hallway, make staff know there are formal meetings.
- Don’t communicate direction outside of your formal mechanisms. It’s fine to keep talking to non-direct reports to keep an ear to the ground, just don’t give directions informally, do that formerly as described above.
So summary advise for product focused CEOs is don’t polarise involvement by either by not letting go or by letting go. Evolve in how you interact with people and delegate so the new staff you hire to scale your business take ownership.
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